Consider the following Income Statement and other information for ValueCo:

ValueCo Income Statement

Revenue 350

(-) Cost of Goods Sold 105

Gross Profit 245

(-) Dep'n & Amort'n 70

(-) Sales, General & Admin 55

Operating Income (EBIT) 120

(-) Interest Expense 36

Income before Taxes (EBT) 84

(-) Tax Expense 21

Net Income 63

Other Items:

Change in Deferred Taxes 18

Change in Net Working Capital 10

Capital Expenditures 72

Tax Rate 25%

What is the Free Cash Flow to the Firm (FCFF)?Show reconciled FCFF from the Income Statement in two ways, beginning with (a.) EBIT and (b.) Net Income.

a. FCFF from EBIT

EBIT

b. FCFF from Net Income

Net Income